Forian expects 39%–49% revenue growth in 2025 while advancing data integration and Kyber platform

Earnings Call Insights: Forian Inc. (FORA) Q2 2025

MANAGEMENT VIEW

* Max C. Wygod, Executive Chairman and CEO, highlighted "Forian's strong second quarter performance, highlighting year-over-year growth, margin improvement and a strategic process driven by the Kyber Data Science acquisition." He emphasized that the company "achieved results that were consistent with our full year outlook" and expressed confidence heading into the second half of the year.
* The company expanded its data capabilities, with Wygod noting, "In the second quarter, we continued to see growth in delivering information products with highlights in areas such as health economics and outcomes research for life-saving therapies and the Kyber Data Science platform, which delivers alpha-generating insights for financial services clients."
* Wygod reconfirmed the outlook: "We expect full year 2025 revenue of $28 million to $30 million, representing 39% to 49% growth year-over-year. Our adjusted EBITDA margin is expected to be in the negative $1 million to positive $1 million."
* CFO Michael Vesey stated, "Our consolidated revenues of $7.5 million were up $2.7 million or 56% compared to the same quarter last year. The impact of the Kyber acquisition contributed approximately $1.9 million or 39% to the growth, with the remaining increase resulting from organic growth in our life sciences data business."

OUTLOOK

* The reaffirmed guidance is for full-year 2025 revenue of $28 million to $30 million, with an adjusted EBITDA margin expected between negative $1 million and positive $1 million.
* Management indicated a "high degree of visibility into second half performance based off of the mix of contracted backlog and renewals in our pipeline, which gives us confidence in our full year growth expectations."
* The outlook remains unchanged from the previous quarter, with continued focus on executing renewals and securing new contracts.

FINANCIAL RESULTS

* Forian reported second quarter revenue of $7.5 million, up 56% year-over-year, and net income of $224,000 for the quarter.
* Adjusted EBITDA for the quarter was $591,000, which compares to a loss of $2.5 million and positive $78,000 year-over-year, respectively.
* Operating income was approximately $50,000 compared to a loss of $3 million in the same quarter last year, driven by higher revenues and lower stock-based compensation, partially offset by higher expenses tied to the Kyber acquisition and increased data costs.
* The company ended the period with $35.6 million in cash and marketable securities and $6.8 million in convertible notes and accrued interest maturing in September 2025.

Q&A

* Richard Kenneth Baldry, ROTH Capital, asked about drivers for hitting the top or bottom of the guidance range. Max C. Wygod explained, "With the Kyber acquisition, the typical contract is an annual license versus the multiyear contract that we had previously... So we have a good portion of renewals that come in the back half of the year, and that has a large impact on hitting the guidance range."
* Baldry inquired about the acquisition environment and cash deployment. Wygod noted, "We're seeing valuations come down from the highs... especially the equity -- high-growth equity or venture-backed entities... we do see a larger willingness for companies to entertain different strategic conversations."
* On organic growth, Baldry asked about sustainability. Wygod responded, "Our health economics outcomes research studies have really been a strong point for Forian... Outside of that, the Kyber Data Science has been growing as we hoped... So those 2 areas are really leading our organic growth."
* Regarding adjusted EBITDA guidance, Wygod explained, "If we decide to invest in more data assets, or to invest in tangential businesses that I believe can generate more revenue. The cost profile might hit the back half of this year where the revenue might be following."
* Baldry questioned the impact of AI on productivity and cost structure. Wygod replied, "We're currently investigating that. It is closer to our R&D line than our COGS... We do constantly look at it and do believe that we can get more output per employee using the right AI support."

SENTIMENT ANALYSIS

* Analysts focused on the sustainability of growth, acquisition strategy, and cost structure, with a neutral to slightly positive tone as they sought clarity on drivers and risk factors.
* Management maintained a confident tone during prepared remarks, using phrases such as "we are optimistic about 2025" and "we feel confident," but showed some caution in Q&A, referencing the need to "hit those renewals" and acknowledging discretionary spend's impact on margins.
* Compared to the previous quarter, analyst questions remained direct and focused on execution, while management's tone was consistently optimistic, carrying forward confidence from Q1.

QUARTER-OVER-QUARTER COMPARISON

* The revenue outlook remains at $28 million to $30 million for full-year 2025, unchanged from Q1.
* Adjusted EBITDA margin guidance is unchanged, ranging from negative $1 million to positive $1 million.
* Revenue rose from $7.1 million in Q1 to $7.5 million in Q2, while net income improved from a loss of $1.1 million to a gain of $224,000.
* Management continues to emphasize the integration and contribution of Kyber Data Science, with increased focus on expanding data coverage and leveraging proprietary data models.
* Analyst questions continued to focus on organic growth and acquisition opportunities, with ongoing interest in the impact of external market dynamics and internal investment decisions.
* The management's confidence and focus on long-term data contracts and product innovation remained consistent with prior quarter.

RISKS AND CONCERNS

* Management called out a "mixed spending environment in our health care and financial services end markets" and noted that "pharma companies remain cautious, driven by a rapidly changing geopolitical and macroeconomic environment."
* Execution risk remains tied to contract renewals and successful integration of new data sources.
* Wygod cautioned that investments in expanding the product portfolio and entering new verticals "may impact temporarily our margin profile."
* The adoption of experimental AI tools is progressing cautiously due to data sensitivity and compliance requirements, with management monitoring productivity gains.

FINAL TAKEAWAY

Forian delivered strong year-over-year revenue growth in the second quarter, driven by both organic gains and the Kyber Data Science acquisition. The company reaffirmed its 2025 guidance and highlighted visibility into future performance, supported by a robust pipeline of renewals and new contracts. Management continues to invest in expanding data capabilities and integrating advanced analytics, while maintaining a disciplined approach to strategic acquisitions and operational efficiency. Investors should monitor the company's execution on contract renewals and margin management as Forian advances its data-driven growth strategy for the remainder of 2025.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/fora/earnings/transcripts]

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* Forian Inc. (FORA) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4813337-forian-inc-fora-q2-2025-earnings-call-transcript]
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